Renewi's(LON:RWI) Share Price Is Down 60% Over The Past Three Years.

It is doubtless a positive to see that the Renewi plc (LON:RWI) share price has gained some 92% in the last three months. But that doesn't change the fact that the returns over the last three years have been disappointing. In that time, the share price dropped 60%. So it's good to see it climbing back up. While many would remain nervous, there could be further gains if the business can put its best foot forward.

Check out our latest analysis for Renewi

Renewi wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over three years, Renewi grew revenue at 3.1% per year. That's not a very high growth rate considering it doesn't make profits. This uninspiring revenue growth has no doubt helped send the share price lower; it dropped 17% during the period. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term). Keep in mind it isn't unusual for good businesses to have a tough time or a couple of uninspiring years.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Renewi's balance sheet strength is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Renewi's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Renewi's TSR of was a loss of 56% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that Renewi shareholders have received a total shareholder return of 23% over one year. That certainly beats the loss of about 6% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Renewi better, we need to consider many other factors. Even so, be aware that Renewi is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.

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